The threat landscape has never been more complex or challenging, and security has never been more critical for our customers or society as a whole. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. As a Premium user you get access to the detailed source references and background information about this statistic. These forward-looking statements generally are identified by the words believe, project, expect, anticipate, estimate, intend, strategy, future, opportunity, plan, may, should, will, would, will be, will continue, will likely result, and similar expressions. Microsoft's revenue rose 2% to $52.7 billion in the three months ended Dec. 31, compared with the average analyst estimate of $52.94 billion, according to Refinitiv IBES. Derivative instruments are recognized as either assets or liabilities and measured at fair value. To ensure accountability over time, we publicly disclose our progress on a multitude of workforce metrics including: We develop dynamic, sustainable, and strategic programs with the goal of providing a highly differentiated portfolio to attract, reward, and retain top talent and enable our employees to do their best work. Quotes delayed by up to 15 minutes. We conducted our audit in accordance with the standards of the PCAOB. GO RESET FILTER. Certain acquired net operating loss carryforwards are subject to an annual limitation but are expected to be realized with the exception of those which have a valuation allowance. The recast of these prior period amounts had no impact on our consolidated balance sheets, consolidated income statements, or consolidated cash flows statements. Our intended result is a global performance and development approach that fosters our culture, and competitive compensation that ensures equitable pay by role while supporting pay for performance. Organizations purchase perpetual licenses and SA is optional. The ideal entry-level account for individual users. Sales Solutions help companies strengthen customer relationships, empower teams with digital selling tools, and acquire new opportunities. This pricing methodology applies to our Level 2 investments, such as commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. The components of intangible assets acquired during the periods presented were as follows: Intangible assets amortization expense was $1.6 billion, $1.6 billion, and $1.9 billion for fiscal years 2021, 2020, and 2019, respectively. Revenue and costs are generally directly attributed to our segments. We also know that solving the carbon problem will require new technology and partnerships. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Select Plus agreements are designed for government and academic organizations to acquire on-premises licenses at any affiliate or department level, while realizing advantages as one organization. As a result of the TCJA, we are required to pay a one-time transition tax on deferred foreign income not previously subject to U.S. income tax. The Google Cloud revenue segment generated 9.3 percent of the company's revenues, up from 4.3 percent in 2018. . Segment-wise results. Nearly all computer manufacturers offer server hardware for the Linux operating system and many contribute to Linux operating system development. We believe potential can be nurtured and is not pre-determined, and we should always be learning and curious trying new things without fear of failure. Download as image Embed. Chart. First of all, users - from 433 million users back in 2016 when it was acquired, up to 740 million users in 2021. Cash used in investing increased $15.4 billion to $27.6 billion for fiscal year 2021, mainly due to a $6.4 billion increase in cash used for acquisitions of companies, net of cash acquired, and purchases of intangible and other assets, a $5.2 billion increase in additions to property and equipment, and a $4.1 billion decrease in cash from net investment purchases, sales, and maturities. This is why we were the first major tech company to support GDPRthe EUs privacy law that is the standard for privacy legislation around the worldand why we are strong advocates for passage of comprehensive federal privacy legislation in the United States. Operating income increased $17.0 billion or 32% driven by growth across each of our segments and the change in estimated useful lives of our server and network equipment. But the most notable thing is what will happen to the other 90 percent. Xbox hardware revenue increased 92% driven by higher price of consoles sold due to the Xbox Series X|S launches. Long-lived assets, excluding financial instruments and tax assets, classified by the location of the controlling statutory company and with countries over 10% of the total shown separately, were as follows: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, To the Stockholders and the Board of Directors of Microsoft Corporation. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. The effort surpassed its initial goals and has been expanded with a new emphasis on connecting learners with jobs that help put their new training to use and connecting employers with skilled job seekers they might not find in traditional networks. Contact Computershare directly to find out more about these services and programs at 800-285-7772, option 1, or visit online at: https://www.computershare.com/Microsoft, You can e-mail the transfer agent at: [email protected]. Our server products are designed to make IT professionals, developers, and their systems more productive and efficient. The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. The federal and state net operating loss carryforwards will expire in various years from fiscal 2022 through 2041, if not utilized. Over the past year, we introduced hundreds of new features, from new presenter modes to new inclusive meeting experiences, that make it easy for everyone to be full participants in meetings, whether theyre joining from home, the office, a conference room, or a factory floor. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license. We want our customers and partners to build their own digital capability and become independent with us, not dependent on us. Critical accounting policies for us include revenue recognition, impairment of investment securities, goodwill, research and development costs, contingencies, income taxes, and inventories. We tested the effectiveness of controls related to the identification of distinct performance obligations, the determination of the timing of revenue recognition, and the estimation of variable consideration. And with Windows 365, we are creating a new category: the cloud PC. Call us toll-free at (800) 285-7772 or outside the United States, call (425) 706-4400. Microsoft. Our devices are designed to enable people and organizations to connect to the people and content that matter most using Windows and integrated Microsoft products and services. On September 20, 2016, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. Microsoft's revenue from 2012 to 2022 financial years, by segment (in billion U.S. dollars) [Graph]. Microsoft said revenue in its "Intelligent Cloud" segment rose 23% to $14.6 billion, with 50% growth in Azure. Organizational tools such as Collections, Vertical Tabs, and Immersive Reader help you make the most of your time while browsing, streaming, searching, sharing, and more. Premium Subscriptions enables professionals to manage their professional identity, grow their network, and connect with talent through additional services like premium search. $ 42,959. We are accelerating adoption of AI innovations from research to products. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Dear shareholders, colleagues, customers, and partners: As I write this, people and organizations everywhere continue to struggle with the uncertainty of a pandemic that continues to cause so much suffering. Lease expense for lease payments is recognized on a straight-line basis over the lease term. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. The primary drag on earnings was the 19% decrease down to $14.2B the company saw in it's personal computing segment with Windows OEM license revenue falling a massive 39%. The earnings provide a further lift to Microsoft after it agreed to acquire gaming giant Activision Blizzard in a $68.7 billion, all-cash deal. Dynamics competes with cloud-based and on-premises business solution providers such as Oracle, Salesforce.com, and SAP. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces. The largest category of OEMs are direct OEMs as our relationship with them is managed through a direct agreement between Microsoft and the OEM. The purchase price included $768 million of cash and cash equivalents acquired. Our vision is to create economic opportunity for every member of the global workforce through the ongoing development of the worlds first Economic Graph, a digital representation of the global economy. Growth depends on our ability to reach new users in new markets such as frontline workers, small and medium businesses, and growth markets, as well as add value to our core product and service offerings to span productivity categories such as communication, collaboration, analytics, security, and compliance. Office 365 Commercial revenue grew 22% driven by seat growth of 17% and higher revenue per user. Equity investments were $6.0 billion and $3.0 billion as of June 30, 2021 and 2020, respectively. Changes in inventory levels in the OEM channel. Aggregate demand for our software, services, and devices is correlated to global macroeconomic and geopolitical factors, which remain dynamic. While the Company has settled a portion of the IRS audits, resolution of the remaining matters could have a material impact on the Companys financial statements. In addition to computing device market volume, Windows OEM revenue is impacted by: Windows Commercial revenue, which includes volume licensing of the Windows operating system and Windows cloud services such as Microsoft Defender Advanced Threat Protection, is affected mainly by the demand from commercial customers for volume licensing and Software Assurance (SA), as well as advanced security offerings. Intelligent Cloud revenue increased driven by Azure. In fiscal year 2021, we closed our Microsoft Store physical locations and opened our Microsoft Experience Centers. Opinion on Internal Control over Financial Reporting. It empowers people with AI-first interfaces ranging from voice-activated commands through Cortana, inking, immersive 3D content storytelling, and mixed reality experiences. Our goal is to help every organization strengthen its security capabilities through a Zero Trust architecture built on our comprehensive solutions that span identity, security, compliance, and device management across all clouds and platforms. SA is included. The company's Intelligent Cloud segment continued to lead revenue growth, up 25.5% compared to the year-ago quarter. Highlights from fiscal year 2021 compared with fiscal year 2020 included: On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (ZeniMax), the parent company of Bethesda Softworks LLC, for a total purchase price of $8.1 billion, consisting primarily of cash. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. We have recast certain prior period amounts to conform to the current period presentation. 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